Is Countrywide too big to fail?

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Today’s LATimes story on the Countrywide crisis raises an interesting question: Is Countrywide -- which makes one out of every six home loans in the U.S. -- too big to fail?

‘The question is, is Countrywide too large to fail? Will the Fed allow it or will it need to step in and bail it out?’ Guy Cecala, publisher of Inside Mortgage Finance, told the Times. A bailout of Countrywide would make the government’s efforts to save automaker Chrysler in the 1970s look puny. ‘Countrywide is more important than Chrysler was back then, particularly given the fragile state of the economy and so much tied to housing,’ Cecala said.

Frequent commenter Cal raises another ominous angle of this story: Yesterday saw huge shocks at two of the major employers in the Northwest Valley-Ventura County area: Countrywide (based in Calabasas) and Amgen (based in Thousand Oaks, Ventura County’s largest private employer). These have been solid, growing companies employing tens of thousands of professionals in good-paying jobs.

Comments? Thoughts? Insights?